Reading 26: Balance Sheet

Question 1

what does a classified balanced sheet report?

Answer 1

separately reports concurrent assets and current and concurrent liabilities

Question 2

Intangible assets - expensed or amortized?

Answer 2

expensed as incurred

Question 3

held-to-maturity securities - expensed or amortized?

Answer 3

amortized

Question 4

components of OE

Answer 4

contributed capital, pref. stock, treasury stock, RE, Noncontrolling interest, accumulated other comp. income

Question 5

other comprehensive income definition

Answer 5

all changes to equity from sources other than net income and trans with shareholders

Question 6

define statement of changes in stockholder equity

Answer 6

summarizes transactions that increase/decrease equity- includes shareholder transactions

Question 7

which bal. sheet item most likely to affect NI? a) debt securities b) debt sec. held to mat c) secur. with intent to profit short run

Answer 7

c) these securities are termed trading securities . debt securities are reported at amortized cost, not market value

Question 8

how are debt securities recorded on bal sheet?

Answer 8

at amortized cost, not market value

Question 9

how do IFRS and GAAP treat discontinued operations?

Answer 9

same way-both require to be reported on income stmt seperately from continuing ops and net of tax

Question 10

how does GAAP and IFTS treat extraordinary items?

Answer 10

GAAP permits unusual and infrequent but IFRS does not permit extraordinary

Question 11

how does GAAP and IFRS treat fixed assets?

Answer 11

IFRS allows for revaluation upwards but not under US GAAP

Question 12

How does bad debt expense affect the balance sheet?

Answer 12

reduces assets (and NI) no affect on liablities

Question 13

how are warranty expenses treated on the balance sheet?

Answer 13

reduces assets when used, originally on balance sheet as a liability